Aug 27, 2023
In the increasingly competitive services industry, customer satisfaction is more crucial than ever. Whether you run a plumbing business or a lawn care service, it's essential to know if your customers are happy and willing to recommend you to others. But how do you quantify customer satisfaction? Enter the Net Promoter Score, or NPS.
What is the Net Promoter Score?
The Net Promoter Score is a simple yet powerful metric used by businesses across the globe to measure customer loyalty. Invented by Fred Reichheld of Bain & Company, it's derived from one straightforward question: "On a scale of 0 to 10, how likely are you to recommend our company/product/service to a friend or colleague?"
Based on the responses, customers are classified into three categories:
Promoters (score: 9-10): These are your brand enthusiasts who will keep buying and refer others, fueling growth.
Passives (score: 7-8): These are satisfied but unenthusiastic customers vulnerable to competitive offerings.
Detractors (score: 0-6): These are unhappy customers who can impede growth through negative word-of-mouth.
Your NPS is calculated by subtracting the percentage of Detractors from the percentage of Promoters. The result is a score ranging from -100 to 100.
Why should service businesses care about NPS?
At first glance, it might seem like just another number. However, your NPS is a window into your customers' experience and loyalty, offering invaluable insights that can guide your business strategies.
Measure customer satisfaction: The NPS helps you assess overall customer satisfaction by giving you a clear view of their likelihood to recommend your services. It provides a quick snapshot of how well your business is meeting customer expectations.
Improve customer retention: Satisfied customers are loyal customers. By focusing on raising your NPS, you're directly working on retaining your customer base. Retention is often more cost-effective than acquisition, making this a profitable focus.
Identify areas of improvement: Low scores and negative feedback highlight areas in your service that need attention. This knowledge can guide you to make informed decisions that enhance your service quality, customer experience, and ultimately, your reputation.
Foster growth: High NPS scores signal happy customers who are likely to spread positive word-of-mouth. In the services industry, where trust and reputation are vital, these personal recommendations can significantly drive growth.
For service businesses, understanding your NPS isn't just about keeping tabs on a number. It's about actively using that information to drive customer satisfaction, loyalty, and business growth. At Applause, we make tracking and improving your NPS effortless, helping you build a customer-centric business that thrives on exceptional service.
How Applause helps improve NPS
Consider the case of Mission Green Services. When they first reached out to Applause, their NPS ratings were inconsistent, and most customers ignored the surveys. Despite their best efforts, they struggled with customer feedback and how to make it actionable. Applause stepped in with our customer feedback analysis and real-time NPS tracking, helping Mission Green Services better understand their global customer health scores, along with each technician’s individual NPS scores. Within three months, their NPS skyrocketed to 91, contributing to increased customer loyalty, reduced customer churn, and an uptick in positive online reviews.
"Through NPS ratings we are seeing technicians elevate their service to the customer because there is another level of accountability. As a company who prides ourselves on service, we get to stay ahead of any issues with each and every visit to the property with real time notifications of detractors."
- Mark Kelbacher, President of Mission Green Services
Get started with Applause
Ready to start leveraging the power of the Net Promoter Score in your service business? Applause is here to help. Reach out to us today to learn how we can assist you in measuring, understanding, and improving your NPS, turning satisfied customers into loyal promoters of your business.